Liability ― passenger transport

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at the liability of supplies of passenger transport made in the UK.

For the place of supply of passenger transport, see the Place of supply of services ― passenger transport guidance note.

For an overview of the concept of VAT liability generally, see the Liability ― overview guidance note.

In-depth commentary on the legislation and case law on the liability of passenger transport is contained in De Voil Indirect Tax Service V4.251B and V4.422.

Passenger transport ― the basics

There is a relatively broad zero rate which applies to various kinds of passenger transport when it is supplied in the UK. However, this relief is by no means exhaustive. For example, whilst the zero rate would typically apply to coach travel or train travel, it would not normally extend to passenger transport in a taxi (although many taxi operators may trade below the VAT registration threshold).

A much narrower reduced rate is also available for certain supplies of ‘cable-based transport’. This relief might apply (for example) to the transport

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